What Is A Forex Cashback Rebate? How To Take Advantage

Forex trading is an excellent way to earn some money on the side or even turn it into your major revenue source provided you are good at it.

However, there is always a chance of losing that you could lose money when you start trading. This why it is advisable for new traders to sign up with a forex broker that offers a forex cashback rebate.

A forex cashback is money returned to a trader for every trade that they execute. It is quickly becoming an industry standard since forex traders like it when they are able to reduce the costs of their trades.

Forex rebates are done in a variety of ways. One method is that the rebates are tallied up and released at the end of the month. This encourages traders to get as many forex trades in to maximize their monthly rebates. Cashback can also been released on a daily basis. This is actual cash and the sort of method that a lot of traders might prefer.

There is still another method but this is more friendly towards the forex broker. The cashback is offered in discounts to future trades. This means that the broker doesn't actually spend money to pay off the cashback but allows the trade to still virtually profit by having a lower overhead on the trade.

These rebates can greatly increase a trader's flexibility on the market. What was once a trade with marginal profit can now bring in a bit more on the trade – which makes it a lot more attractive. This can be useful when the trader is operating in the short term or is focusing on scalping.

Calculating Forex Cashback Rebates

These rebates are calculated in two ways. First, calculations can be done by round turn per lot. When it is done this way, it usually averages out at $3. The minimum saving a trader can get is $1.50, with a maximum of $7. That may feel like small change but they can add up over time. If you are a trader that carries out hundreds of trades in a month, you could very well see hundreds of dollars in savings.

The other method for cashback calculation is by the spread. In this method, there are no dollars involved but pips. The average cashback offering is around 0.5 pips, but it can go higher or lower. Potential traders should look around for what is best on the market and make a final decision.

To join cashback programs, traders will have to register. This is pretty much the only step necessary to start the process. Traders need choose a reliable cashback provider and broker and they can immediately start trading. The forex cashback rebate program is usually automatic, so there are no added complications.

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